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Obamacare Small Business Exchange Will Be Delayed A Year

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Small businesses won't be able to buy health insurance via HealthCare.gov until next year, President Barack Obama's administration announced Wednesday.

The delay in functionality for the so-called SHOP exchanges represents the latest setback in the Obama administration's efforts to implement the three-year-old Affordable Care Act. The development also comes just days before HealthCare.gov, the online portal for individual and family health coverage in more than 30 states, is supposed to be working better after its troubled first two months.

Small businesses that want to utilize the federally run SHOP exchanges, and the tax credits worth up to half the cost of insurance that are available to some firms, will have to sign up through an insurance agent or broker or directly with a health insurance company, an administration official explained via email. In an attempt to mitigate the failure of the online application and enrollment process that was supposed to be in place, small businesses can submit their applications for tax credits whenever they file their taxes rather than in advance, the official wrote.

“This new delay announcement is a disappointment but not a surprise. Small businesses continue to be low on the priority list during the Obamacare implementation process," Kevin Kuhlman, manager of legislative affairs at the National Federation of Independent Business, said in a written statement. "The continued delays add to uncertainty and contribute to the decision of many owners to take early renewals of their small-group plans.” The National Federation of Independent Business opposed the Affordable Care Act and was the lead plaintiff in the lawsuit challenging its constitutionality, which the Supreme Court ultimately upheld.

The administration previously said online enrollment on the SHOP exchanges would be available by the end of this month, following earlier delays. Prior to Wednesday's announcement that the administration would facilitate enrollment via insurers, agents and brokers, paper applications were the only means small companies could employ to utilize the SHOP exchanges. Maryland also delayed its state-run SHOP exchange, though other states' exchanges are operational. The federal government is operating SHOP exchanges in more than 30 states, and the remainder are being run by states.

"Small businesses will able to enroll directly into a SHOP plan through an insurer, agent or broker, and get can certified for a tax credit after they enroll. We will also offer an improved comparison shopping feature online so small businesses can choose a plan before enrolling in one," Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services, said during a conference call with reporters Wednesday.

Unlike the federal- and state-run health insurance exchanges for individuals and families that limit sign-up to a certain period during the year, the SHOP exchanges are supposed to allow companies to enroll workers at any time. Still, companies with current benefits that expire at the end of the year have until just Dec. 23 to choose a health plan that will be in effect on Jan. 1, the official wrote.

The delay of the SHOP exchanges is partly a byproduct of the administration's scramble to get HealthCare.gov reliably working for individual consumers, Bataille indicated. "It was important for us to prioritize the functionality that would enable consumers, individually, to shop and enroll online in coverage," she said.

Online enrollment won't be possible on the SHOP exchanges until next year for benefits that will be available in 2015, the administration said.

Earlier this year, the administration delayed another key component of the SHOP exchanges. Under health care reform, small business employees were supposed to be able to choose among any of the plans available on the exchanges. For 2014, employers will select the coverage for all workers instead.

This post has been updated with additional information from the Centers for Medicare and Medicaid Services.

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